The present invention pertains to the payment of insurance, particularly medical insurance claims.
Currently, there are thousands of medical health insurance plans. Major employers negotiate custom medical insurance plans for their employees. Other companies select one of several insurance plans offered by an insurance company which may or may not include various options. Small business associations negotiate yet other health insurance contracts. The employees within these various employer groups obtain medical services at a plurality of covered medical facilities. Conversely, the various medical facilities treat patients with a myriad of different health plans.
The Employee Retirement Income Security Act (ERISA) prohibits the co-mingling of health insurance payments. A single instrument, such as a check, cannot be issued that shares risk. This results in insurance companies issuing a very large number of checks, and medical providers receiving large numbers of checks. Fulfillment vendors function as a go-between between the payers and the medical service providers. However, they too are bound by the ERISA rules against co-mingling of funds and must take care to avoid co-mingling funds received from payers and print or produce a multitude of checks to the various medical providers. Typically, a fulfillment vendor must send a medical provider a different and separate check for funds from each payer.
The funds are accompanied by an Explanation of Benefits (EOB) which is formatted and the contents normalized to the ANSI-835 standard. However, the normalized content is not standardized from employer group to employer group. Even though the normalized content may specify such terms as “non-covered” or “pending”, different health insurance contracts give different meanings to these terms. For example, a “non-covered” service in from one contract can mean that the service provider must write-off the amount while in another contract the insured is responsible for payment of the “non-covered” amount. Secondary insurers add other possible interpretations of “non-covered”. It is often difficult for the medical provider to determine, to a certainty, such simple information as the patient's co-pay, what amounts may be billed to the patient, which amounts must be written off, and the like. Determining this information generally requires a custom interpretation of the EOB from each of the various employer groups. Such individual interpretation is labor-intensive and expensive to the medical service providers. Moreover, due to the uncertainty regarding which charges must be written off and which may be billed to the patient, patients are often billed for charges which their insurance contract requires to be written off.
Only certain financial instruments meet ERISA regulations against co-mingling of funds. Certain legal entities such as trusts may be required for use of certain financial instruments. In addition, not all payees accept all types of financial instruments. Some financial instruments require electronic methods and access to certain networks and/or servers. Furthermore the financial instrument used to move funds and the EOB are intrinsically linked. A particular financial instrument may require a specific type of format for transmission of associated EOBs. As new financial instruments are developed and/or options for EOB formats permitted, system complexity for incorporation of new payment methods grows quickly.
A medical claims processing system typically implements one or several methods of payment. As new payment methods are developed, and the cost structure becomes more attractive, payers purchase or subscribe to these new payment methods with additional systems and/or subscriptions. However, interfaces between systems or providers for access to alternative methods add cost and complexity to tracking of payments and EOBs. Some payment methods have rejections such as the service provider is no longer with the payee, the payment may be refused by the payee such as with a stored value card, the payee may have changed banks and the financial instrument is not valid, and the like. A rejection of a payment causes the payer to seek an alternative payment method. An alternative payment method can have a different format for either or both the financial instrument and the EOBs, and force a payer to a different system with tracking and continual prevention of co-mingling funds between multiple systems.
The present application provides a new and improved automated payment system with an intelligent router of payments which overcomes these problems and others.